If you run a business that accepts front-end payments (either online or at a physical location), you have much to look forward to in 2020 because we expect the overall payments landscape to undergo some exciting changes.
Most of these revolve around the usual areas of improvement – security, speed and efficiency. The payments landscape is getting better, and it’s definitely worth your time to keep up with these new developments.
Fraud Prevention Is Evolving
The biggest threat to businesses (especially online) comes from bad actors who want to “get in” for various reasons – from innocuous data collection attempts to serious crimes that aim to bypass the banking flow. The payments landscape in its present form is robust enough to handle the common types of fraud – from the local backend security to the at-source, bank-level security.
However, as you can guess, it’s never enough. For example, the AFP Payments Fraud And Control Survey observed that an astonishingly high percentage (87%) of large companies (with over $1bn revenue) had to face payments frauds in 2018. The same number stood at 69% for businesses with revenue below the $1bn mark.
What this means is that there’s never a bad time for everyone involved to invest in future-facing technologies that can prevent frauds more effectively.
This is where artificial intelligence comes in.
AI has a huge role to play as far as payments technologies are concerned. AI-driven fraud prevention technologies will help find anomalies, patterns and suspicious transactions before it’s too late. This can potentially save businesses, banks and card issuers billions of dollars every year.
Businesses Won’t Need Multiple Gateways
There are dozens of payment methods available to customers. From the omnipresent card-issuers like Visa, MasterCard and Amex to exciting cryptocurrencies, this set is only growing. It’s not always easy for businesses to accept all these payment methods because it leads to a cumbersome payments stack.
So, until now, it’s been about striking the right balance – you want to accept as many payment methods as is possible without making your payments stack unreasonably heavy and expensive.
Moving forward, we expect to see a major shift in that businesses will be able to simplify their payments stack at scale without forgoing any payment methods.
Biometrics Will Be The Norm
For years, point of sale transactions have relied on digital authentication. While that isn’t going to change anytime soon, we expect various biometric interfaces to make things faster and more secure in 2020.
Experts estimate that by the end of next year, annual biometric transactions in the United States alone could cross the 18 billion mark. As of now, fingerprint scanning and facial recognition remain the two most popular and easily integrable methods. Moving forward, you can expect widespread adoption of iris recognition and vein mapping, in combination with these two.
Widespread adoption of biometrics is important in two ways: it speeds up the authentication, and it is generally believed to be more secure against common breaching/fraud methods.
B2Bs Will Look To Become Exclusively Digital
B2Bs have unique requirements in terms of payments processing. While B2C businesses have to process a large number of small payments, B2Bs usually have to process a small number of large payments.
Traditionally, B2Bs have preferred slower but more robust methods like wire transfers and checks. This, however, is set to change with B2Bs around the world choosing to go digital.
This also means that the way B2Bs invoice their clients will change drastically. We already have many front-end payment processing solutions that let B2Bs invoice their clients.
Dynamic Codes Are Set To Get Better, Safer
Many card issuers and banks have invested heavily in creating an elaborate system of dynamic codes that make the traditional ways of storing data on the card more secure. The EMV cards (Europay, MasterCard and Visa) are now everywhere.
These codes are set to get safer, more robust and overall less vulnerable to attacks and will act just like dynamic authorization tokens that will eventually help the bank process the transaction. It’s safe to assume that card readers and other POS terminals will eventually integrate these systems as new breakthroughs are made.
Mobile Payments Will Be Much Bigger Than Once Thought
Mobile points of sale have been hugely popular throughout the world – especially in places that lack the infrastructure required for traditional POS solutions. mPOS solutions have also made it much easier for business owners and employees who have to travel frequently in order to make sales.
The overall size of the global mPOS market stands at around $26bn. More importantly the compound annual growth rate for this market is estimated to be almost 19% – a sign of great potential.
2020 will see deeper market penetration from mPOS providers, along with innovations that will make the whole market more consumer friendly and safer.